the incoming data supports

the economy can sustain a reasonable cruising speed. we'll ease the speed to gradually to pace purchases, however any movement made by considering the brakes by raising short term rates are far in the future. >> the tail of the taper, the federal reserve chairman lays out a road map for scaling back on stimulus. bond yields jump and we'll see what it mens for your investments. treating obesity, 1/3rd of american adults and 17% of children are considered to have a disease and could have implications for doctors, patients, insurers and health care. congress questions the effectiveness of a safety mandate and skrud news the mandate. that and more tonight on nightly business report for wednesday, june 19th. ben bernanke has spoken and now investors all around the world have a much better idea of when the federal reserve will

start cutting back on the massive stimulus program. the fed chairman said that process could begin later this year and the bond purchases could end completely by the middle of 2014 but only if unemployment and housing continue to improve. wrapping up a two-day policy meeting ben bernanke noted the economy is doing better, still policy makers left the fed's key interest rate unchanged at 0%. investors didn't like what they heard and stocks and bonds sold off on the news. the dow tumbled and the nasdaq lost almost 40 and the s and p down. a level we haven't seen since madge of last year. our steve has more on bernanke and today's fed news. >> reporter: fed reserve chairman ben bernanke dropping a bombshell saying if the economy follows the path the forecast

says it will, they could begin tapering the asset purchases by the end of the year and end them by the middle of the next year when the unemployment rate is around 7%. here is what he said. >> if the incoming data is consistent, the committee currently anticipates it would be appropriate to moderate the purchases later this year and if the subsequent data remains broadly aligned with the expectations we'll continue to reduced and the pace of purchases of measure steps through the first half of the next year ending purchases mid year. >> in the statement today there were also some surprises. the fed said that the risk to the labor market and the economy had diminished, so a little more upbeat and the fed reduced the forecast for inflation but a very strong half a point this year, all the way down to 1%. the fed says they are looking for 2% inflation but of course, the fed continued the current purchases, so one of the big headlines is there was no tapering and actually not one

but two descents in the statement today. federal reserve president of st. louis jim fullars said he thought the fed is not aware enough of inflation whenne este george from kansas city said she did not support it. >> joining us to talk more, chief economist for moodies. what did we learn today? >> well, we learned that the fed is going to taper qe at the end of the year, end qe by this time next year and start raising interest rates by the early part of 2015. of course, that depends on the economy and that the economy sticks to the script that the fed believes it will and, you know, that's most likely economic sen scenario and interest rate path. >> mark, what do you think of the timetable? do you think the economy is ready to have the training wheels come off? >> yeah, i do. you know, i think that by late

this year, the fiscal head winds, the tax increases and spending cuts will begin to fade that will let the better private economy shine through that is a long narrative in story but i think it is the best and most likely story and yes, at that point i think it makes sense to start tapering qe ending and starting to raise interest rates. >> if the economy is getting better which allows the tapering of the qe, why did the markets react so negatively? >> yeah, good question. you know, if you read sort of the fine print in the fomc statement, it was pretty hawkish. they dowed back their worries about the risks to the economy. they lowered their forecast for the unemployment rate. they even dismissed the lower inflation to be temporary. i think the markets took a look at that and said, you know, maybe the risks are higher that they are going to end qe faster

than we anticipated just yesterday or the day before. the other thing i would point out is these markets, the bond market, stock market, all the markets have come a long way over a short period of time so they are vulnerable to anything off script so that may contribute to the ups and downs we see in the last few weeks. >> investors also want a handle where the interest rates are going for the 30-year mortgage and housing market and the ten-year, how much higher it will go. what is your forecast and what impact will that have on the still fragile housing market? >> interest rates are going higher. you know, they will go up and down and all around, that's what interest rates do. my sense is by the end of the year, by this time next year, interest rates will be higher and they will move steadily higher over the course of the next several years and, you know, that will be hard for the economy to digest but if they rise because the economy is

improving because we're creating jobs then i think the recovery will be okay and housing will be okay. the better job market will trump the higher interest rates and we'll be fine. >> always great to see you. thank you for coming by tonight. tyler, so how should you be investing based on what ben bernanke said today? for answers we turn to jim paulson, chief investment strategiest at wells market. >> what should individual investors be doing? should they make changes in part foli folios? >> it reached 1700 this year and a month ago we did that, susie and i'm not inclined to raise that this year. the stock market ranged -- entered a range. raising bond yields will

continue to rise through the balance of this year and ten-year yield and might end closer to 3% and will have to digest by the fed but the economy will continue to improve better than expected keeping stocks from falling very much. so i would take advantage of this trade range, if you will. number one, make sure you're down not as exposed to bond prices as you've been perhaps because yields will go higher, and bond prices are likely to fall and within the stock market, take advantage like days like today when it really comes down to maybe add a little bit to stocks you want to hold into 2014, and that would be to me, some more of the sectors that are more sensitive to better economic growth and when it rallies, if it rallies over the next several months, maybe take advantage of the strength to sell off the bond-like stocks that are sensitive to interest rates or defensive stocks and to plow that money back into more

economic licensetivety. i think the market is in tact and will go higher again next year. >> so you believe, as mark did, that a positive economy is going to trump from the market's standpoint is going to trump the effects of raising interest rates. that's basically your view here? >> i think so, tyler. i really do. i think if you go back a couple years when the word that the armageddon was coming and the world was going to end, we would have loved to have today and someway today to me should be a celebrated milestone, rather than some scary event because really what happened today was even the fed now, which has been very worried about the economy is admitting it is indeed, getting strong enough that it can start to back off from stimulating. >> uh-huh. >> so that's a great thing. that means it can stand on it's own two feet and that's great longer term for equity. >> as much as you say this, investors are scared by seeing the triple digit gains and losses like today, you know,

mark is selling off on when pre sumbly is a good news day s. there a way that individual investors can benefit from this volatility play with it? >> i think so. and i think that's what i would look at. i would keep your eyes on not necessarily day in and day out or month in and month out. look where they are from a year ago and still making good progress and on days like this rather than fear, i would go hunting for bargains today. i would look at the technology stocks you want to get into or beat up industrials and to take advantage of people whole sale dumping those today and buying on that weakness in anticipation that maybe it will oscillate over the next several months. >> you mentioned categories of stocks where you might do cautious or incoursous buying, the big equipment makers, the cats and so on and so forth. you mentioned a moment ago,

though, that you would lightening up on stocks that perform like bonds. what comes to mind is utilities and telecoms, right? >> yeah, they are a lot like a bond that pays a constant coupon payment every year. so when interest rates moves, they really affect the performance of the stocks and utilities and telecoms are getting hit as bond yields move up. if they continue to move higher, those stocks will under perform other equities. i would take advantage of days when they rally to lightening up exposure there and move away from there because i think over the next year or so, those are not good areas. another popular index that people plowed into is the highest-paying dividend stocks and i would move away from that and move to more economic sensitivity. >> all right.

lots of good information. thank you so much, jim, as always. jim paulson. fedex might quivel a bit saying customers are choosing lower-priced shipping options instead of priority. the profits of the company fell 45% in the last quarter and fedex lowered the growth forecast for the year. nevertheless, shares of fedex rose 1% today because profits down were better than wall street's forecast. one of the key areas the fed focuses on is housing, and it might start taking notice. the mortgage bankers association says mortgage applications fell more than 3%. the culprit, mortgage rates hitting a high. failing to live up to their end of a $25 billion national

mortgage settlement to help mortgage owners stay in their houses. after 59,000 complaints the watchdog overseeing that settlement said bank of america, jp morgan chase, citi group and wells fargo each failed to pay fines leveed against them or correct problems they were ordered to fix. for more log on nbr.com. you hear this all time, when banks, other companies or others settle charges of wrongdoing, they are often allowed to pay fines without admitting guilt but not anymore. marry white will require admissions of wrongdoing in cases involving serious fraud or harm to investors. here is what white said about the directive today. >> it will be to some degree case by case but with some guidance with the staff what kind of indication and among the cases, you'll balance

everything, harm done, how the conduct was, how important it was perhaps to get a quick resolution. >> the policy came out of a review that white began when she joined the fcc in the spring. still hahead in the program obesity is declared a disease, doctors, people that struggle with their weight. first a look at the market. microsoft says it has taken down a global cybercrime ring freeing up millions of computers from a virus believed to have ripped off a billion million

from infected pcs before it was discovered. the digital crimes unit worked with authorities in more than 80 countries to track down what affected 2 million units most in the u.s., europe and hong kong and today microsoft announced plans to recruit computer experts to identify and fix major security flaws in the latest windows operating software. it's offering rewards of up to $150,000 for these hacker wackers. to qualify you have to be 14 or older. there is apparently no bonus for george zimmer, the founder executive chairman and chief pitchman of mens warehouse. you know him from his commercials where he says "you're going to like the way you look, the guarantee it." he was fired today by the bored of directors. in a statement zimmer said he and the bored had been at odds for months about the direction of the company and that quote,

instead of fostering the kind of dialogue until the bored room that has in part contributed to the success, the bored has inappropriately chosen to silence my concerns through termination. >> turning to market focus on a day when the fed was the driver, some stocks had stories their own. blackberry to under perform. bernstein says fewer than expected companies and individuals stepped up to the blackberry ten smart phone. shares up more than 30% in a year dropped nearly 4.5% today to close at $14.18. and sprint lost ground as dish network walked away from making a new take over bid and mcquary recommended investors take profits there. sharps dropped 4% three times the normal volume closing at $7 on the nose. sprint still up more than 120% over the past year. and video will begin to

license chip technology to third parties responding to high quality graphics on mobile devices. sharps closed at 14.48 and up more than 21% this year. and micron has sales of $2.3 billion. shares set a new five-year plus high before the report was released right after the market closed. on the day, micron gained 1.5% closing at 13.97 and the stock more than double in a year. some trouble ahead for one of the signature features of health care reform. a report from the nonpartisan government accountability office says the new healthcare exchanges being set up by the federal government in more than 30 states may not be ready for open enrollment by the october 31st deadline. the problem, key frame works like eligibility for federal subsidies and monitoring plans and what consumers pay, haven't been worked out just yet.

sugary drinks should not be purchased with food stamps says the mayors of 18 cities n. a letter the mayors say it's time to test and evaluate limits to the use of federal subsides to purchase sweetened drinks that led to obesity and weight problems. >> speaking of obesity, as municipalities fight it, obesities should be classified as a disease they say. bertha coombs has more on what that could mean for businesses, insurers, and pays for health care and more. >> reporter: obesity has long been called an epidemic with more than 35% of americans very or extremely over weight. now the american medical association has decided it's time obesity itself is classified as a disease. >> we want to prevent and cure

type 2 diabetes and stop cart vascular disease. >> reporter: the obesity society among those who have been calling for a disease designation hailed the move. >> obesity that affects a third of the population is something that people don't routinely discuss with their doctors until it starts resulting in things like diabetes and heart disease and joint disease. >> reporter: it's because of those costly serious chronic conditions most large employers have been on the forefront of fighting obesity in the work force. one in ten offer incentive payments for reaching wellness goals. more than half cover lap band and surgery under insurance benefits. >> they will continue doing that because they are looking at different ways in which to manage and control healthcare costs and this is just one of many ways that i see them continuing to try and control

their costs. >> yes, they cover the lap band and most insurance companies cover surgery after the patient has already gained at least 100 pounds over the course of their lives. >> reporter: boston university's caroline says calling ocho beelsbeels -- obesity a disease will allow doctors to take charge before it's more. >> this is a step to prompt insurance companies to treat this disease earlier. >> reporter: the ama's counsel on science and public health recommended against designating oc obesity as a disease saying it's too problematic to define when you have people that are over weight but otherwise healthy. 60% of delegates decided to approve the measure. and coming up, how to prevent the next railroad disaster and congress is taking

a look but how commodities, treasuries and kcurrencies faird today. jd power and associates out with the latest survey on quality for new cars. topping the list again is porsche which averaged 80 problems per 100 vehicles and gm second and lexus infinity and chevrolet round out the top five. at the bottom of the list toyota scion and fiat and mitsubissubm nissan and mini finished last. 1200 recalls of 2013 cars due to a defect in the backseat.

234 injuries or incidents reported over the faulty seat latch. it's the first recall ever for the car maker that received a near perfect rating from consumers reports magazine. at a senate hearing on consolidation in the airline industry lawmakers urged the obama administration to look at the merger of american airlines and u.s. airways. the concern is with so many carriers combining and fewer choices, consumers may pay too much. now to concerns about the safety of the nation's ageing railroads and rail beds. after derailments of passenger and freight trains, a hearing on how to upgrade the country's railroad infrastructure. >> reporter: just days before two trains collided and derailed injuring at least 70 people,

weakness in rail joints in the track were detected but no action was taken. the ntsp investigation is not complete but on capitol hill today, chairman debra told lawmakers how the condition of that track might have set the stage for the sent. >> it's the joint bars that join those two sections of track. the hanging ties indicate that the rail and the ties were unsupported. >> reporter: rail safety is getting lawmakers attention after three accidents last month including a fiery crash involving a freight train carrying chemicals colliding with a garbage truck outside baltimore and a veteran railroad worker was killed while working on the track. a spokesman talked about fatalities and impact on the surrounding communities. >> it's not just for the employees. every time we have a major collision that kills an

employee, the surrounding community is also involved. >> reporter: meanwhile, the railroad industry and federal government are on a collision course from meeting a 2015 mandate to install updated anti crash signaling technology called positive control. getting mixed signals, some want a three-year delay and some want it to be done on a case by case basis. >> i'm not sure a case by case basis is music to the ears of somebody regulating the federal government. >> it would make a lot more sense if we're talking about doing some sort of an extension for compliance with this to do it in a way that recognizes that all the. >> reporter: -- railroads have to compile with that. >> reporter: lawmakers and the railroad industry are at odds over the billions needed to pay for track improvements nationwide and railroad track repairs. i'm hampton pearson in washington. >> tonight, we heard the joke

about someone trying to buy the brooklyn bridge but how about buying the empire state building. that's almost what happened when a top new york city real estate company offered to buy the skyscraper from 2 billion-dollar in cash from the family that confroms the building. it's lower than the tower's appraised value and comes weeks after investors improved a plan to take the empire state building public selling a real estate investment trust. no commit on the offer. i would say it's priceless, huh? >> i think it is. i think king kong will get into the bidding soon. maybe we can buy it. it would be nice to own. >> that's nightly business report for us. i'm susie gharib thanks for watching. >> and i'm tyler mathisen. thanks for watching from me, as well. read more at nbr.com and meanwhile, we'll see you back here tomorrow.

hello there, welcome to "newsline." it's thursday, june 20th. i'm catherine kobayashi in tokyo. u.s. president barack obama has used the symbol of the cold war to talk about moving beyond the tensions of that era. he stood at the brandenburg gate, which once overlooked the berlin wall. he called on russian leaders to renew a p